Public service boss warns of a decade of cuts

Ian Watt, the secretary of the Department of the Prime Minister and Cabinet, says the fiscal environment in the public service was getting tighter and would be tight for at least a decade.
Photo: Nic Walker

The country’s top mandarin has warned the Australian Public Service to expect a tight fiscal environment for at least the next decade and to prepare for increasing competition for the delivery of its functions and services.

Pulling no punches in a speech to the Institute of Public Administration Australia on Wednesday, the secretary of the Department of the Prime Minister and Cabinet,
Ian Watt
, said these were the two main challenges facing the public service.

“Of course you can’t have a conversation with public servants in Canberra without talking about the fiscal environment," he said.

The fiscal environment in the public service was getting tighter and in his view it would be tight for at least a decade.

“Now that’s a challenge but it’s not the first time the APS has faced such a challenge, although those who have been recruited since 2000 might not appreciate that fact. We came through the last one fairly well and I see no reason why we won’t do that in this case as well."

But the public service did need to embrace opportunities to be more effective and smarter, and a more stringent fiscal situation was a powerful signal to do so.

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He welcomed a return to the white paper process that he said had fallen into disuse in the late 1990s.

“Interestingly the current government has quite deliberately a number of white papers in the planning process. Perhaps they will give us just that sort of approach that we need in a number of areas in Australia including, perhaps, in future public service reform".

The Commission of Audit was the first step in the reform of government and that should help facilitate thinking about the future of public administration particularly at commonwealth level but also on the commonwealth-state dimension.

“But we bureaucrats should not simply wait for the Commission of Audit to do our thinking for us. We should already be adjusting priorities to meet the tightening fiscal environment - it’s going to stay tight - and the new government, and thinking about the major changes that might come. I’m sure you are. If you’re not, I suggest you do."

“We should not only be assessing the way we work but what we’re working on. We should be reviewing our critical functions and looking at what we can and should stop doing."

Dr Watt said he still believed in the importance of “One APS" but that did not mean the public service should be a monolith.

“It does mean we work generously and collaboratively and that we work as a team."

He did not think the public service had anything to fear from the increasing contestability of its functions. Nor did he think it would result in the end of the public service as a recognisable sector in the economy.

On the contrary, it provided increasing incentives and opportunities for the public sector to grow and adapt its strengths.

The future public sector would be quite different but recognisably different. While not the sole source of advice for government it was irreplaceable because if its impartiality and independence from sectoral interests.